Baby boomers underestimate cost of long-term care: study
Baby boomers have mistaken ideas about the future costs of long-term care and about the years they will spend in retirement, according to a recent Nationwide Financial survey.
When asked to estimate how much a year nursing home care will cost in 2030, they estimated an average of $111,507 -- roughly half the actual estimated costs for that year. However, most correctly estimated current costs at approximately $67,000 a year.
"Nursing home costs have increased more than 4 per cent annually since 1974,” says John Carter, Nationwide's president of retirement plans. "What a year of nursing home care costs today will not even come close to the actual cost when boomers really need it."
Three-fourths of the respondents say they think of long-term care as nursing home care or assisted living. In fact, nearly half of long-term care is done in the home by a home health-care workers or is adult day care, according to Carter.
Many baby boomers are in denial that they will ever need long-term care and underestimate their life expectancy, Nationwide maintains, and this could be a costly error.
One of the reasons people buy long-term care insurance is to avoid burdening a spouse or grown children when they can no longer care for themselves.
"Often people who intended to work longer are forced into retirement due to health reasons or employment changes. Others may not anticipate their own longevity, especially with today’s medical advances,” Carter says.
Trouble is, It's always been been an expensive product and is now getting a lot pricier -- especially for single women who may most
need help in old age.
Most respondents say they have a plan for their finances in retirement, but 57 per cent admit they have not taken long-term care costs into consideration.
Only 25 per cent have long-term care policy, for instance. Others say they plan to cover the costs with retirement savings (22 per cent) or other personal savings (21 per cent).
What about you? Does LTC coverage factor into your plans? Or is it simply too expensive?
By Gordon Powers, MSN Money
Posted by: Get Serious | Jun 26, 2021 3:31:11 AM
If $111,507. is roughly half of what long-term care cost will be in 17 years, then by this calculation, it should be expected to cost $223,000. per year in 2030. Let's examine how 1 small room with 1 bed would individually cost $18,500. per month or $600. per day !! ANY "facility" that would charge that much per month should be prosecuted and sent to a long-term prison. How many people have an annual salary or will have an annual pension of $200K+ per year these days or at any time over the next 17 years ? If this is factual and NOT some insurance company scare tactic or scam, 95% of Canada's over 80 years of age women will be stacked up in a barn in the middle of nowhere. And their children better be pulling in 1/2 a Million salary per year by the time they turn 80, otherwise, they'll be joining mamma in the hayloft.
Posted by: Get Serious | Jun 26, 2021 3:37:19 AM
Ohhh and btw... present long term care facility costs per individual for a single room... not shared... is less than $2,000. per month --- $24,000. per year. NOT $67,000.00. If the article's numbers hold true, the government better jack up the CPP and OAS... or pass legislation to legalize assisted suicide.
Posted by: Sir Terence | Jun 26, 2021 7:54:51 AM
The $2000.00/month quoted by Get Serious, does not consider the portion covered by OHIP. If the province wasn't covering the major share, the cost to the individual would be much higher.
Posted by: Peter Jones | Jun 26, 2021 8:51:52 AM
The OHIP portion is already covered by the OHIP tax thatis assessed and charged to the taxpayer when the yearly income tax returns are prepared . so I agree with the comment posted by "Get Serious"
Posted by: hv | Jun 26, 2021 4:33:39 PM
Our family has had experiences with the system. Nursing home fees, in Ontario anyway, are regulated. They currently range from $1,674.14 to $2,274.86 monthly depending whether rooms are basic, semi-private or private. Retirement homes are not are more lightly regulated and can charge much more. The biggest problem is a shortage of nursing home beds and waiting lists that sometimes can be several years or more. Long Term Care or LTC seems to be a generic term that includes home-care as well as the other types mentioned. TLC was Elvis' motto.
Posted by: lauren | Jun 27, 2021 10:21:01 PM
Well, as we age, in debt, some not in debt, we have off spring in debt, some not in debt, the care homes need more supplies, the nursing demand is forgin trades and the resposnible accountabilites in brithish colombia work both hand in hand for accounts in a proper professional provided enivironments, and safe from the things human beings conduct them selfs to do.
For families having to lookm after there own as they age, instructing the needs of moneies, issued transfer payements to pay big morgages off, the car at the expense of a aged tax rate payer, well in todays product and service expectations cliental sociaty today, its descett as they lesson to grow how to look after, but again learning check books were more on the stress calls from creditors later on in life as the entire familiyes may be subjected to extreame thinking involving finances and old age securtires revovling retirements and health at the offsprings home, including debt. oh well it just me though in time travel.
Posted by: Get Serious | Jun 28, 2021 12:49:45 AM
@ Lauren....... give your head a shake !! Again !! Again !! One more time !! Now, lay of the booze. I have NEVER seen, let alone tried to read a more convoluted, inane and completely nonsensical piece of crap like the one you wrote.
Posted by: linda | Jul 1, 2021 12:52:28 AM
Are these American numbers? In Alberta, the top rate in a public facility is under $2000/month. ONe reader correctly pointed out that this is a subsidized rate, with the provincial health department covering the rest. Only in America...! The increasing ads for LTC insurance build on our fears of an American-type system with American-type costs. Yes, if you want all the bells and whistles and first-rate food, you'll have to pay, but the public system does not currently cost $67,000 yearly in many places in Canada.
Posted by: Bob | Jul 1, 2021 12:22:07 PM
Yes what it does cost and the service provided for are aged is pathetic. Don't put me in one please.
Assisted suicide would be a better option.
Posted by: Bill | Jul 30, 2021 4:48:25 PM
I'm tired of reading these dire warning articles re boomers and retirement. It seems that boomers are being warned to save multiple millions of dollars if they don't want to end up on the street in their old age. I think the financial services experts have a vested interest in promoting savings and investment and that a lot of the warnings we see about the necessity to top up RRSPs and fill up TFSAs is just "the sky is falling in" by those who stand to gain by it.